More transparency coming to blog reviews under new FTC rules

The FTC has announced new rules governing "consumer-generated" media outlets …

Bloggers will come under the watchful eyes of the Federal Trade Commission for the first time, as the agency has finalized new rules governing bloggers and the products they write about. "Consumer-generated media" outlets (e.g., bloggers) will now have to disclose if they are being compensated by a manufacturer, advertiser, or service provider when they review an item. So if a blogger gets a laptop from a manufacturer to review and gets to keep it, he or she will have to make that fact public.

The new guidelines don't tell bloggers how they need to make the disclosure, but they do lay out the penalties: up to $11,000 per violation with the possibility of injunctions to boot, although the FTC makes it clear that the fines are a last resort. "Worst-case scenario, someone receives a warning, refuses to comply, followed by a serious product defect; we would institute a proceeding with a cease-and-desist order and mandate compliance with the law," FTC assistant director of advertising practices Richard Cleland told Fast Company. The FTC could also order that consumers be reimbursed in cases where a relationship between blogger and advertiser isn't disclosed and they suffer financial harm because of it.

The FTC began studying the issue in January 2007, and the debate since then has been hot and heavy. Some commenters during the rule-making processes said that there was no need for the government to get involved, arguing that industry self-regulation with occasional FTC enforcement under existing laws was sufficient. There were also fears that the commission would wield a broad regulatory axe in the forest of consumer-generated media.

If you're into gadgets and computer hardware and like to blog about your newest purchases, chances are good that you'll never draw the FTC's attention. Those who buy a product "with his or her own money and praise it on a personal blog or on an electronic message board will not be deemed to be providing an endorsement," read the rules. At the other end of the spectrum, anyone who is directly compensated to write about a product by an advertiser is covered by the new rules.